Sabtu, 14 Disember 2013

The short-term pain of higher sugar price can lead to longer-term gains

Teh tarik kurang manis…" On the many occasions that I ordered this "milk tea with less sugar" at a stall or a restaurant, the drink would end up still being served with a high level of sweetness. It made me ponder whether the tea would lose its charm if less sugar was used.

However, the situation may be changing right now. With the removal of sugar subsidy following the recent budget announcement, the aroma of teh tarik has finally been given the attention it deserves. I now happily find the tea tastes just as good, if not better, with less sugar.

The rationalisation of the sugar subsidy is of particular interest to me. To my friends, they would be aware that I am quite health conscious.

Based on the last survey done in 2005, Malaysians consumed an average of 26 teaspoons of sugar daily, compared with 17 teaspoons in the 1970s. We may not have realised our high level consumption but sugar is found in almost every kind of processed food and beverage. Based on our eating habits nowadays, our sugar consumption level has most likely gone up again since the 2005 survey.

Sugar leads to many ailments and the number of people affected by such ailments is fast increasing. Just Google "diseases caused by sugar" and you will find that diabetes, obesity, heart disease, cancer, etc are all the ill effects of sugar. There is even an article entitled "141 reasons sugar ruins your health".

In the 2009 statistics shared by the Health Ministry, out of our total adult population of 16 million, 11.6 million – or 73% adults nationwide – had diseases like diabetes, hypertension or cancer. The International Diabetes Institute recorded Malaysia as having the fourth highest number of diabetics in Asia with 800,000 affected persons in 2007. This number increased to 2.6 million registered patients in 2011.

Based on the above facts, the sugar subsidy did not just cost us dollars and cents, it also created a negative impact to our health and lifestyle. It in fact has probably caused us billions over the years to subsidise our healthcare system in order to treat sugar-related illnesses. The sugar subsidy was literally killing us.

The 34-sen-per-kg sugar subsidy removal is expected to bring a savings of about RM1.1bil without factoring the savings from the healthcare subsidy. These funds can be channelled to other causes that need more support and bring greater benefits to all, such as housing the nation.

Let us take a look at the Budget 2014 proposed plan for affordable housing. The Government aims to allocate RM578mil to the National Housing Department (JPN) to implement Program Perumahan Rakyat which will see the construction of 16,473 housing units. In addition, the Government will also allocate RM1bil to the PRIMA project to further construct 80,000 housing units selling at 20% below the market price.

In summary, the savings every year from the sugar subsidy alone is sufficient to fund a PRIMA's initiative like this every year. The short-term pain of higher sugar price can lead to longer-term gains. The subsidy for affordable housing can be temporary, until the Government is successful in elevating the country to a higher income economy.

If the smaller sugar subsidy bill can free up resources for social and economic developments and help the rakyat to attain a better quality of life, the subsidy rationalisation move should be welcomed. According to the data listed on the Finance Ministry's website, the RM3.3bil savings from the 20 sen fuel subsidy cut in September is more than the RM2.7bil we spent on public healthcare and housing last year! Imagine the impact it has on our country development if more subsidies can be re-looked into and redirected to better causes.

It may seem as though there is "no sugar coating" from the latest budget announcement, I would like to view it as the start of a sweet note that can improve our personal health and house the nation. Obviously, the first good thing is we can now enjoy teh tarik that is more natural in flavour and healthier in general.

FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

Barakah and Puncak Niaga had announced to Bursa Malaysia about the awards but SapuraKencana had yet to make an announcement at press time.

It was estimated that Package A was worth RM1.5bil, package B RM1.8bil, and Packages C and D collectively RM6.7bil, sources said.

Barakah and Puncak Niaga, nonetheless, noted that the total value of the contracts will depend on the actual works issued by the production sharing contractors during the contract period.

The contracts are for a period of three years commencing 2014.

In a statement, Petronas said: "The contract, which was a competitive tender open to both local and international companies, involves the transportation and installation for offshore facilities and includes all the necessary services required for the execution of the scopes such as marine spread services, required tools, specialised equipment and manpower services."

An analyst said the award was within expectation, as the players that received the contracts possessed the know-how and assets to carry out the work.

Petronas petroleum management vice-president Ramlan Abdul Malek said two of the four packages were exclusively open only to local barge owners to ensure maximum local participation while maintaining high competitiveness and standards.

"The contract is part of continuing efforts by Petronas to further optimise its project deliveries and offshore activities in terms of safety, costs and schedule, while ensuring security and availability of the necessary offshore transportation and installation barges to execute work planned by production sharing contractors (PSCs) collectively."